Attractive Feed-In-Tariffs To Boost Growth In Indonesia’s Solar Market

Solar electricity in Indonesia will grow rapidly in the coming years due to a new government decree involving the use of Feed-in-Tariffs (FiT).

The Ministry of Energy & Mineral Resources (ESDM) has issued this decree to provide support mechanisms for utility-scale solar photovoltaic systems, exhibition and management service, in addition to target 5.000 MWp of solar PV capacity in the next 2-3 years.

Regarding the government program, the FiT will range from USD 0.145 cents to USD 0.25 per kWh of solar power and will offer quotas to Independent Power Producers (IPPs). Through the regulation, Indonesia could receive USD 12 billion (IDR 156 trillion) of additional investments.

Meanwhile, the Indonesian government has set aside USD 100 million for subsidizing renewable energy in 2017, which may bolster demand and the development of Indonesia’s solar power market. The ESDM is optimistic that projects will be implemented smoothly.

More opportunities are set to abound for the solar market in Indonesia’s industrial estates as well, according to Gervasius Samosir, Manager at Solidiance Indonesia, an Asia-focused management consulting firm. “The Indonesian real estate market is seeing better growth than before, following the issuance of economic incentives coming into play”, he said.

“Along with this growth, we’re seeing only few industrial estate players in Indonesia having established energy-efficient practices into their areas. So I believe there is high potential for renewable energy providers to explore possible opportunities within this market”, Samosir adds.

A white paper titled “Indonesia’s Green Industrial Estates and Best Practices” suggests the need for industrial real estate players to adopt green practices. The paper states that there is only less than 5 industrial estates across the Archipelago that have complied with green standards.

The Minister of Energy and Mineral Resources (ESDM), Sudirman Said, envisions the island of Bali as a pilot area of clean energy in Indonesia, and had met with the Deputy Governor of Bali, I Ketut Sudikerta, to discuss action plans in realizing the vision.

Leave a Reply